At mid-day, bullish CBOT markets build on overnight good news

Friday's CBOT corn trade was buoyed at mid-day by two bullish factors that unfolded late Thursday and through the overnight hours leading up to the opening bell.

"Corn is up 2 1/2 to 3 cents here this morning as it continues to build support above the $4.27 price level in the July," says market analyst Jason Ward of Northstar Commodity Investment Co., in Minneapolis, Minnesota. "This was a key area of resistance that the market was able to penetrate this week and now it should be solid support."

Chinese officials announced overnight that the nation would cease its corn exports. While this is not the first time such news has broken and failed to reach fruition, this announcement has the proof of action behind it, according to Ward.

"They also brought 19.6 million bushels of corn out of the domestic grain reserve and sold it on the market to help ease domestic prices," Ward says of the Chinese action overnight. It worked, as corn prices fell last night on Dalian exchange, but soybeans were higher as they continue to battle food inflation in China."

"The House passed the 2007 energy bill, which includes an aggressive Renewable Fuels Standard, which helped prop up the corn market overnight," Ward says. "It appears that it will be more of a market factor into 2009 and 2010, rather than 2008, but if passed in the Senate and approved by the President it would almost certainly bring CRP acres out early. We are hearing 3 to 6 million acres would need to be released."

The soybean trade touched new contract highs in Friday morning trading, driven mainly by a drier outlook for Argentina, where rains have slowed and early-season fieldwork and development recently. With a dry forecast for the near term, this could be something to watch.

"There was some relief this week in Argentina, but now the forecast looks dry for the next 10 days," Ward says. "Five percent of the corn is pollinating right now and the beans will become a concern in the next week or two. Prices are trading up 14 cents at mid-day at $11.31 3/4."

In the wheat trade, India and Egypt are in the driver's seat, Ward says. The two nations are continuing talk of more exports, and this is driving the market higher: 26 cents higher at mid-day. This, too, could become a weather market in the long-term, Ward adds.

"More export talk from India and Egypt are driving prices. The market has been digesting this for a few days this week and it has been a positive factor," he says. "In the longer term, dryness in India is going to become a market factor, but we'll know more about that when the monsoon season starts in January. They are much drier than they were last year at this same time heading into the Monsoon season."

Friday's CBOT corn trade was buoyed at mid-day by two bullish factors that unfolded late Thursday and through the overnight hours leading up to the opening bell.